You do not owe a penalty if the total tax shown on your return minus the amount you paid through withholding (including excess social security and tier 1 railroad retirement (RRTA) tax withholding) is less than $1,000.

For 2014, your total tax on Form 1040 is the amount on line 63
reduced by the following.

Unreported social security and Medicare tax or RRTA tax from Forms 4137 or 8919 (line
58).

Any tax included on line 59 for excess contributions to IRAs, Archer MSAs, Coverdell education savings accounts, and health savings accounts, or any tax on excess accumulations in qualified retirement
plans.

The following write-ins on line 62:

Uncollected social security and Medicare tax or RRTA tax on tips or group-term life
insurance,

Tax on excess golden parachute payments,

Excise tax on insider stock compensation from an expatriated
corporation,

Note.
When figuring the amount on line 62, include household employment taxes only if
you had federal income tax withheld from your income or you would owe the
penalty even if you did not include those taxes.

If you filed Form 1040A, your 2014 total tax is the amount on line 39 reduced by the amount on line 38, and any refundable credits on lines 42a, 43, 44, and
45.

If you filed Form 1040EZ, your 2014 total tax is the amount on line 12 reduced by the amount on line 8a and 11.

For 2014, the amount you paid through withholding on Form 1040 is the amount on
line 64 plus any excess social security or tier 1 RRTA tax withholding on line
71. Add to that any write-in amount on line 74 identified as "Form 8689." On
Form 1040A, the amount you paid through withholding is the amount on line 40
plus any excess social security or tier 1 RRTA tax withholding included on line
46. On Form 1040EZ, it is the amount on line 7.

You do not owe a penalty if you had no tax liability last year and you were a U.S. citizen or resident for the whole year. For this rule to apply, your tax year must have included all 12 months of the year.

You had no tax liability for 2013 if your total tax was zero or you were not required to file an income tax return.

Ray, who is single and 22 years old, was unemployed for a few months during
2013. He earned $6,700 in wages before he was laid off, and he received $1,400
in unemployment compensation afterwards. He had no other income. Even though he
had gross income of $8,100, he did not have to pay income tax because his gross
income was less than the filing requirement for a single person under age 65
($10,000 for 2013). He filed a return only to have his withheld income tax
refunded to him.

In 2014, Ray began regular work as an independent contractor. Ray made no estimated tax payments in 2014. Even though he did owe tax at the end of the year, Ray does not owe the underpayment penalty for 2014 because he had no tax liability in
2013.

For 2013, your total tax on Form 1040 is the amount on line 61
reduced by the following.

Unreported social security and Medicare tax or RRTA tax from Forms 4137 or 8919 (line
57).

Any tax included on line 58 for excess contributions to IRAs, Archer MSAs, Coverdell education savings accounts, and health savings accounts, or any tax on excess accumulations in qualified retirement
plans.

The following write-ins on line 60:

Uncollected social security and Medicare tax or RRTA tax on tips or group-term life
insurance,

Tax on excess golden parachute payments,

Excise tax on insider stock compensation from an expatriated
corporation,

Look-back interest due under section 167(g),

Look-back interest due under section 460(b),

Recapture of federal mortgage subsidy, and

Additional tax on advance payments of health coverage tax credit when not
eligible.

Any refundable credit amounts listed on lines 64a, 65, 66, 70, and any credit from Form 8885 included on line
71.

If you filed Form 1040A, your 2013 total tax is the amount on line 35 reduced by any refundable credits on lines 38a, 39, and
40.

If you filed Form 1040EZ, your 2013 total tax is the amount on line 10 reduced by the amount on line 8a.